By James Oleander
It appears that trading without indicators has become a lost art form. If you have been day trading for a little while or are a seasoned veteran, you know that there are more trading indicators than ever. There are indicators now that basically just put the word “buy” or “sell” on your trading chart to let you know when to open and close a trade. The problem is does anybody actually know why you are buying or selling at that point? It just seems like people are content to just take their chances allowing a robot to make their trading decision for them.
What many people don’t realize is, that many of these indicators are just telling the trader what has already happened, hence they are known as lagging indicators. The problem is that the markets don’t follow some kind of set plan. Just because something worked a few times in the past doesn’t mean that its going to continue to work. The market is constantly evolving. The use of lagging indicators will never account for that fact. Traders seem to be satisfied just taking their chances with indicators such as MACD, stochastics, and moving averages. To many traders, these indicators represent success and failure.
The day a trader is finally able to clear their screen and look at a chart of the respective currency pair, without any clutter, is the day they take their first step to understanding the forex market. A trader can then look at price action at its purest form. Indicators have made traders a bit lazy. They are basically using them as an interpreter of the market. The price moves a certain way and their indicator, in its own way, is translating what that move means. Well, if instead of using a translator to play the forex market, if traders actually learned the language of price action, these lagging indicators would be obsolete.
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